Export Controls and National Security

As we have read in recent press reports, many of
America's allies have suggested that the moves within the U. S.
Department of Defense to speed up export licensing are needed.
American industry also would like to see the decision process work
faster. But before we set the United States on a fast track toward
"globalization," I want to argue for some new means to come to a
common understanding among allies about what are the major threats
to peace and stability in the world.

It
is important to recognize that the business of national security is
the province of government, and that while the first principle of
limited government should be to support free trade and industry,
there are sound reasons to exercise caution in revising U.S. arms
export and international security policies. With all of the talk in
the capitals of Europe and in Washington about globalization, we
must be cautious about what we sell and to whom. When I say "we," I
mean not only the United States, but also its allies and
friends.

For
the United States, with international responsibilities and military
forces forward-stationed and deployed in many hot spots around the
world, decisions on the export of dual-use technology, arms, and
co-production should be measured against a clear standard. United
States arms and the dual-use and militarily critical technologies
embedded in commercial systems should not be exported when there is
a risk that they may be used against our own soldiers, sailors,
airmen, or Marines. We in the United States should be concerned,
moreover, that exported weapons or embedded technologies not be
used against, or to threaten, America's friends or allies.

Such
a policy is not isolationist in nature. It is prudent.

Something was lost when the Coordinating
Committee for Multilateral Export Controls (COCOM) system was
discarded in 1994.1 The ability of the
United States and its allies to come to a common negotiated
agreement, in an institutionalized manner, about which states or
countries constituted threats was lost. The Soviet Union has
disappeared, but threats to peace by rogue states or nations that
seek to become suzerains or regional hegemons still exist.

TAKING PRUDENT RISKS

From a defense and security standpoint the United States does not
and should not stand alone. As recent history proves, if the United
States has to act on a large scale militarily, it is most likely to
act as a member of a coalition. Whether in war, in disaster relief,
or in United Nations or other humanitarian operations, the
likelihood is that the United States will act with others. It is
therefore very important that weapons systems and technologies, as
well as command and control systems, be compatible and even shared
with our allies and friends.

It
is clear that the globalization of industrial production and
software development is in the nature of manufacturing and finance.
But business and financial institutions are careful to ensure that
they are taking prudent risks in their decisions to cooperate
overseas, to make loans, or to share intellectual property. The
same sort of caution must be exercised by the U.S. and its allies
when decisions are made on the sale or export of arms and
militarily critical technologies.

Let
me give a few examples of poor risks. After a lengthy investigation
in the United States and in Europe during the mid-1980s, we
discovered that the design documents for both the Stinger air
defense missile system and another NATO-shared naval missile system
were compromised to the Soviet Union. The design documents for
these systems were shared by the United States with European
companies because they were part of an attempt at globalization.
Suffice it to say that it was the very practice of co-production
that created a system of weak links that was penetrated by the
KGB.

That
took place at a time when there was a commonly agreed threat, and
when a system was in place among the NATO countries and Japan to
control the release of technology. Today, an agreed-upon system of
controls, such as COCOM, no longer exists, and the Wassenaar
Arrangement, as a registry of exports, is no substitute for a
rigorous examination of which technologies should be
controlled.

The
export licensing system for U.S. munitions list items, both for
technology and arms sales, is an arrangement that favors national
security. In this system, the Department of State has insisted on
affirmative support from the Department of Defense and the
intelligence community before proceeding with any export license.
Within the Congress, the Senate Foreign Relations and House
International Relations Committees have provided a final sanity
check for exports over a certain dollar amount. But items have
eased their way under this threshold and have been reverse
engineered.

This
munitions list process takes into account the need for timely
approvals, but it is nevertheless structured to ensure thorough
vetting and review of any export. This careful, layered process has
minimized breakdowns, in contrast with the far more lax process of
export approval under the Commodity Control List, which controls
items that have dual uses (military and civilian).

In
contrast, we have learned how the relaxation and liberalization of
our export control policies on certain dual-use technologies--for
instance, satellites--particularly the transfer of export licensing
authority during the Clinton Administration from the State
Department to the Commerce Department, led to improvements by China
in missile systems that can now hit the United States with multiple
warheads and improved accuracy. It is this error that led to the
return of licensing authority to the Department of State.
Notwithstanding all of the pressure to move more quickly on
licensing decisions, and the desire of the Administration to take
part in "globalization," the United States should move
carefully.

Congress has an oversight responsibility
in this process that must be recognized. However the licensing
systems may be revised, some means must be built in to ensure that
the representatives of the American people exercise their
responsibilities for America's national security. Any new export
licensing system, whether for dual-use items or for munitions list
items, should be subject to prudent oversight by the congressional
committees which historically have provided the final review for
technology transfers.

These are serious matters that involve the
lives of American military men and women. It is easy to understand
why our allies and friends protest the application of our export
regulations to them, but America's allies and friends must
understand that some of their export decisions and practices affect
the United States. Moreover, technology and weapon systems can be
re-exported.

A CASE STUDY: CHINA

Consider, for example, that China will
develop an airborne early warning and control radar system with the
technological assistance of Israel, a strong American ally and
security partner. These AWACS-like aircraft, when they become
operational, may serve as a command-and-control platform for
aircraft capable of launching missiles developed with the
assistance of other U.S. allies. Such a system of command, control,
early warning, and high-tech weapons will certainly be used to
deter attempts by the United States to maintain the peace and
stability of the Western Pacific should China carry out its threats
to use force against Taiwan. The systems could also be used to
affect the control of the islands in the South China Sea.

The
same situation exists with respect to China's air-to-air refueling
systems, which also are being developed with the assistance of one
of the strongest allies of the United States, Great Britain. None
of the nations involved in these sales and exports have forces or
vital interests in the Asia-Pacific region, but these exports have
a direct effect on the United States and some of its traditional
friends and allies.

Moreover, given China's track record of
reverse engineering and re-exporting, some of the systems
eventually may end up in countries like Iran, which remains a
potential threat to U.S. forces. For example, China was sold two
AN/TPQ-37 Firefinder artillery locating radar sets by the United
States in 1988. Within a year of their delivery, Beijing had cloned
them and marketed a similar radar system, the Type-704, at a major
arms exhibition in China. China also bought French Exocet cruise
missiles. Within a few years these were reverse-engineered and sold
to Iran as the C-801 Silkworm. Chinese Type-69 Main Battle Tanks
were equipped with illegally acquired laser range-finders that
closely resembled American equipment. Between 100 and 200 of these
tanks ended up in Iraq.

CONCLUSION

The
point is not to castigate America's alliance partners and friends,
who, we recognize, pursue their own national interests. It is to
emphasize that we need to forge a common policy. However, in the
absence of commonly agreed-upon export standards and an established
consultative mechanism, like the old COCOM, national security
decisions on strategic trade and exports made in Washington must be
based on the interests of the United States, which has its forces
deployed securing peace in some places where some allies do not.
American security and the safety of America's forces cannot be
globalized.

Dr. Larry M.
Wortzel is Director of The Asian Studies Center at The
Heritage Foundation. This paper is adapted from remarks delivered
at the 1999 Common Defense (COMDEF) Conference on Defense
Cooperation in an Era of Globalization, held at the National Press
Club in Washington, D.C., on November 9, 1999.

Endnote

1.COCOM controls were
agreed upon through consultation among the members of the NATO
alliance (except for Iceland and Spain) and Japan. COCOM was formed
as a Western export control body in 1947. It ended by common
agreement on March 31, 1994. The 1996 Wassenaar Arrangement on
Export Controls for Conventional Arms and Dual-Use Goods was
established by 33 nations to replace COCOM.